Thyroid hormone (TH) is an ancestral signal linked to seasonal life history transitions throughout vertebrates. TH action depends upon tissue-localized regulation of levels of active TH (triiodothyronine, T3), through spatiotemporal expression of thyroid hormone deiodinase (dio) genes. We investigated the dio gene family in juvenile Atlantic salmon (Salmo salar) parr, which prepare for seaward migration in the spring (smoltification) through TH-dependent changes in physiology. We identified two type 2 deiodinase paralogs, dio2a and dio2b, responsible for conversion of thyroxine (T4) to T3. During smoltification, dio2b was induced in the brain and gills in zones of cell proliferation following increasing day length. Contrastingly, dio2a expression was induced in the gills by transfer to salt water (SW), with the magnitude of the response proportional to the plasma chloride level. This response reflected a selective enrichment for osmotic response elements (OREs) in the dio2a promoter region. Transcriptomic profiling of gill tissue from fish transferred to SW plus or minus the deiodinase inhibitor, iopanoic acid, revealed SW-induced increases in cellular respiration as the principal consequence of gill dio2 activity. Divergent evolution of dio2 paralogs supports organ-specific timing of the TH-dependent events governing the phenotypic plasticity required for migration to sea.